TMI-12-006, Submittal of Decommissioning Funding Status Report

Submittal of Decommissioning Funding Status Report

ML12101A105
Person / Time
Site:	Three Mile Island
Issue date:	03/30/2012
From:	Pace D GPU Nuclear Corp
To:	Document Control Desk, NRC/FSME
References
TMI-12-006
Download: ML12101A105 (14)

Text

GPU Nuclear, Inc.

Three Mile Island Nuclear Station NUCLEAR Route 441 South Post Office Box 480 Middletown, PA 17057-0480 Tel 717-948-8461 March 30, 2012 TMI-12-006 10 CFR 50.75 ATTN: Document Control Desk United States Nuclear Regulatory Commission Washington, D.C. 20555-0001

SUBJECT:

Three Mile Island Nuclear Station, Unit 2 Docket No. 50-320, License No. DPR-73 Decommissioning Funding Status Report for the Three Mile Island Nuclear Station, Unit 2 Pursuant to 10 CFR 50.75(f)(1), GPU Nuclear, Inc. is hereby submitting a Decommissioning Funding Status Report for Three Mile Island Nuclear Station, Unit 2 for the year ending December 31, 2011. The report contains an analysis based on a site specific decommissioning cost study and an analysis based on the NRC formula described in 10 CFR 50.75(b) and (c).

There are no regulatory commitments contained in this submittal. If there are any questions or if additional information is required, please contact Mr. Phil H. Lashley, Supervisor - FirstEnergy Nuclear Operating Company Fleet Licensing, at (330) 315-6808.

Sincerely, Danny L. Pace President

Attachment:

Decommissioning Funding Status Report Three Mile Island Nuclear Station, Unit 2 As of December 31, 2011 cc: NRC Region I Administrator NRC Project Manager NRC Resident Inspector

Attachment TMI-12-006 Decommissioning Funding Status Report Three Mile Island Nuclear Station, Unit 2 As of December 31, 2011 Page 1 of 13 Decommissioning Analysis Based on Site Specific Decommissioning Cost Study

1. Decommissioning funds estimated to be required pursuant to 10 CFR 50.75(b) and (c) are based upon a site specific decommissioning cost study, Decommissioning Cost Analysis for Three Mile Island Unit 2, dated January 2009, and escalated to 2011 dollars:

Radiological $884,551,275 Non-Radiological 33,576,579 FirstEnergy Corp. Consolidated $918.127.854 The estimated total decommissioning costs escalated to future year dollars (2034 - 2054) is $2,552,867,000.

2. The amount accumulated in external trust funds as of December 31, 2011:

After Tax Metropolitan Edison Company $308,298,782 Pennsylvania Electric Company 165,117,425 Jersey Central Power & Light Company 191,340,458 FirstEnergy Corp. Consolidated $664,756,665

3. There are no longer any funds to be collected from the ratepayers.

4. The assumptions used regarding escalation in decommissioning cost, rates of earnings on decommissioning funds, and rates of other factors used in funding projections:

Consolidated Ownership Interest in Unit 100%

Estimated Rate of Escalation in Decommissioning Costs 2.81%

Estimated Net Investment Rate 2.00%

Estimated After-Tax Rate of Return 4.81%

Year of Site Restoration Completion 2054 Dormancy Period Early 2034 - Mid-2043 Year of Three Mile Island Nuclear Station, Unit 1 Operating 2034 License Termination An additional assumption is that the decommissioning activities for Three Mile Island Nuclear Station, Unit 2 will be synchronized with those of Three Mile Island Nuclear Station, Unit 1 such that the licenses for both units will be terminated concurrently.

5. There are no contracts upon which the owners/licensees are relying pursuant to 10 CFR 50.75(e)(1)(v).

6. There are no modifications to the licensee's current method of providing financial assurance since the last submitted report.

Attachment TM1-12-006 Page 2 of 13

7. There were no amendments to the Trust Agreements for the above-mentioned owners of Three Mile Island Nuclear Station, Unit 2.

8. Schedules 1 through 3 each contain an analysis of funding earnings and withdrawals for the three owners of Three Mile Island Nuclear Station, Unit 2; Metropolitan Edison Company, Pennsylvania Electric Company, and Jersey Central Power & Light Company; respectively. Schedule 4 contains a consolidated analysis for FirstEnergy Corp.

9. Mathematical rounding was performed during the development of the supporting calculations.

10. References A. Decommissioning Cost Analysis for Three Mile Island Unit 2, dated January 2009.*

B. FinancialEscalation Analysis for the Decommissioning of Three Mile Island Unit 2, dated May 2009.*

• Both documents were previously provided in GPU Nuclear letter, subject: "Three Mile Island Nuclear Station, Unit 2 Docket No. 50-320, License No. DPR-73 Decommissioning Funding Status Report for the Three Mile Island Nuclear Station, Unit 2," dated March 29, 2010 (Accession Number ML100960464).

Attachment TMI-12-006 Page 3 of 13 Schedule 1 Metropolitan Edison Company Reflects 50% ownership in Three Mile Island Nuclear Station, Unit 2 Pre-Tax After-Tax Equivalent Estimated Weighted Average Net Investment Rate 2.00%

Estimated Escalation Rate 2.81%

Estimated After-Tax Rate of Return 4.81% 6.03%

Qualified Trust Balance on December 31, 2011 308,298,782 Non- Qualified Trust Balance on December 31, 2011 Total 308,298,782 Beginning 2 Ending Year Balance Deposits Earnings 1 Withdrawals ,3 Balance 2012 308,298,782 14,829,171 323,127,953 2013 323,127,953 15,542,455 338,670,408 2014 338,670,408 16,290,047 354,960,455 2015 354,960,455 17,073,598 372,034,052 2016 372,034,052 17,894,838 389,928,890 2017 389,928,890 18,755,580 408,684,470 2018 408,684,470 19,657,723 428,342,193 2019 428,342,193 20,603,259 448,945,453 2020 448,945,453 21,594,276 470,539,729 2021 470,539,729 22,632,961 493,172,690 2022 493,172,690 23,721,606 516,894,296 2023 516,894,296 24,862,616 541,756,912 2024 541,756,912 26,058,507 567,815,419 2025 567,815,419 27,311,922 595,127,341 2026 595,127,341 28,625,625 623,752,966 2027 623,752,966 30,002,518 653,755,484 2028 653,755,484 31,445,639 685,201,122 2029 685,201,122 32,958,174 718,159,296 2030 718,159,296 34,543,462 752,702,759 2031 752,702,759 36,205,003 788,907,761 2032 788,907,761 37,946,463 826,854,225 2033 826,854,225 39,771,688 866,625,913 2034 866,625,913 41,624,461 (1,252,500) 906,997,874 2035 906,997,874 43,538,623 (1,829,000) 948,707,497 2036 948,707,497 45,542,138 (1,885,500) 992,364,135 2037 992,364,135 47,639,665 (1,934,500) 1,038,069,300 2038 1,038,069,300 49,835,414 (1,990,000) 1,085,914,715 2039 1,085,914,715 52,134,013 (2,047,500) 1,136,001,228 2040 1,136,001,228 54,540,048 (2,112,500) 1,188,428,775 2041 1,188,428,775 57,059,143 (2,168,000) 1,243,319,919 2042 1,243,319,919 59,696,377 (2,231,000) 1,300,785,296 2043 1,300,785,296 59,568,617 (62,352,500) 1,298,001,413 2044 1,298,001,413 57,397,221 (104,712,000) 1,250,686,634 2045 1,250,686,634 54,269,697 (122,418,500) 1,182,537,831 2046 1,182,537,831 50,815,020 (126,092,500) 1,107,260,352

Attachment TMI-12-006 Page 4 of 13 2047 1,107,260,352 47,011,947 (129,881,000) 1,024,391,298 2048 1,024,391,298 42,820,246 (134,157,500) 933,054,044 2049 933,054,044 38,832,719 (125,721,000) 846,165,763 2050 846,165,763 34,745,769 (123,800,500) 757,111,033 2051 757,111,033 30,281,260 (127,563,000) 659,829,293 2052 659,829,293 26,111,412 (116,972,500) 568,968,205 2053 568,968,205 24,756,527 (54,279,500) 539,445,231 2054 539,445,231 24,454,652 (31,032,500) 532,867,384 Total (1,276,433,500)

Note 1: The earnings are calculated using the estimated After-Tax rate of return.

Note 2: The withdrawals are Metropolitan Edison Company's share of the total decommissioning expenditures contained in the FinancialEscalation Analysis for the Decommissioning of Three Mile Island Unit 2, dated May 2009 (Reference B). The expenditures are assumed to be made at the beginning of the year.

Note 3: The estimated escalation rate has been applied to the withdrawals.

Attachment TMI-12-006 Page 5 of 13 Schedule 2 Pennsylvania Electric Company Reflects 25% ownership in Three Mile Island Nuclear Station, Unit 2 Pre-Tax After-Tax Equivalent Estimated Weighted Average Net Investment Rate 2.00%

Estimated Escalation Rate 2.81%

Estimated After-Tax Rate of Return 4.81% 6.03%

Qualified Trust Balance on December 31, 2011 135,679,263 Non-Qualified Trust Balance on December 31, 2011 29,438,162 Total 165,117,425 Beginning Ending Year Balance Deposits Earnings 1 Withdrawals2,3 Balance 2012 165,117,425 7,942,148 173,059,573 2013 173,059,573 8,324,165 181,383,739 2014 181,383,739 8,724,558 190,108,296 2015 190,108,296 9,144,209 199,252,505 2016 199,252,505 9,584,046 208,836,551 2017 208,836,551 10,045,038 218,881,589 2018 218,881,589 10,528,204 229,409,794 2019 229,409,794 11,034,611 240,444,405 2020 240,444,405 11,565,376 252,009,780 2021 252,009,780 12,121,670 264,131,451 2022 264,131,451 12,704,723 276,836,174 2023 276,836,174 13,315,820 290,151,994 2024 290,151,994 13,956,311 304,108,305 2025 304,108,305 14,627,609 318,735,914 2026 318,735,914 15,331,197 334,067,111 2027 334,067,111 16,068,628 350,135,740 2028 350,135,740 16,841,529 366,977,269 2029 366,977,269 17,651,607 384,628,875 2030 384,628,875 18,500,649 403,129,524 2031 403,129,524 19,390,530 422,520,054 2032 422,520,054 20,323,215 442,843,269 2033 442,843,269 21,300,761 464,144,030 2034 464,144,030 22,295,205 (626,250) 485,812,985 2035 485,812,985 23,323,617 (914,500) 508,222,102 2036 508,222,102 24,400,137 (942,750) 531,679,489 2037 531,679,489 25,527,259 (967,250) 556,239,498 2038 556,239,498 26,707,260 (995,000) 581,951,758 2039 581,951,758 27,942,637 (1,023,750) 608,870,646 2040 608,870,646 29,235,872 (1,056,250) 637,050,268 2041 637,050,268 30,589,977 (1,084,000) 666,556,245 2042 666,556,245 32,007,700 (1,115,500) 697,448,445 2043 697,448,445 32,047,693 (31,176,250) 698,319,888 2044 698,319,888 31,070,863 (52,356,000) 677,034,751 2045 677,034,751 29,621,207 (61,209,250) 645,446,708 2046 645,446,708 28,013,462 (63,046,250) 610,413,920

Attachment TMI-12-006 Page 6 of 13 2047 610,413,920 26,237,271 (64,940,500) 571,710,691 2048 571,710,691 24,272,796 (67,078,750) 528,904,737 2049 528,904,737 22,416,728 (62,860,500) 488,460,965 2050 488,460,965 20,517,570 (61,900,250) 447,078,286 2051 447,078,286 18,436,575 (63,781,500) 401,733,361 2052 401,733,361 16,510,186 (58,486,250) 359,757,297 2053 359,757,297 15,998,904 (27,139,750) 348,616,451 2054 348,616,451 16,022,120 (15,516,250) 349,122,321 Total (638,216,750)

Note 1: The earnings are calculated using the estimated After-Tax rate of return.

Note 2: The withdrawals are Pennsylvania Electric Company's share of the total decommissioning expenditures contained in the FinancialEscalationAnalysis for the Decommissioning of Three Mile Island Unit 2, dated May 2009 (Reference B). The expenditures are assumed to be made at the beginning of the year.

Note 3: The estimated escalation rate has been applied to the withdrawals.

Attachment TM1-12-006 Page 7 of 13 Schedule 3 Jersey Central Power & Light Company Reflects 25% ownership in Three Mile Island Nuclear Station, Unit 2 Pre-Tax After-Tax Equivalent Estimated Weighted Average Net Investment Rate 2.00%

Estimated Escalation Rate 2.81%

Estimated After-Tax Rate of Return 4.81% 6.03%

Qualified Trust Balance on December 31, 2011 183,653,355 Non-Qualified Trust Balance on December 31, 2011 7,687,103 Total 191,340,458 Beginning Ending 1

Year Balance Deposits Earnings Withdrawals2,3 Balance 2012 191,340,458 9,203,476 200,543,934 2013 200,543,934 9,646,163 210,190,097 2014 210,190,097 10,110,144 220,300,241 2015 220,300,241 10,596,442 230,896,683 2016 230,896,683 11,106,130 242,002,813 2017 242,002,813 11,640,335 253,643,148 2018 253,643,148 12,200,235 265,843,384 2019 265,843,384 12,787,067 278,630,450 2020 278,630,450 13,402,125 292,032,575 2021 292,032,575 14,046,767 306,079,342 2022 306,079,342 14,722,416 320,801,758 2023 320,801,758 15,430,565 336,232,323 2024 336,232,323 16,172,775 352,405,098 2025 352,405,098 16,950,685 369,355,783 2026 369,355,783 17,766,013 387,121,796 2027 387,121,796 18,620,558 405,742,354 2028 405,742,354 19,516,207 425,258,562 2029 425,258,562 20,454,937 445,713,498 2030 445,713,498 21,438,819 467,152,318 2031 467,152,318 22,470,026 489,622,344 2032 489,622,344 23,550,835 513,173,179 2033 513,173,179 24,683,630 537,856,809 2034 537,856,809 25,840,790 (626,250) 563,071,349 2035 563,071,349 27,039,744 (914,500) 589,196,593 2036 589,196,593 28,295,010 (942,750) 616,548,853 2037 616,548,853 29,609,475 (967,250) 645,191,078 2038 645,191,078 30,985,831 (995,000) 675,181,909 2039 675,181,909 32,427,007 (1,023,750) 706,585,167 2040 706,585,167 33,935,941 (1,056,250) 739,464,858 2041 739,464,858 35,516,119 (1,084,000) 773,896,977 2042 773,896,977 37,170,789 (1,115,500) 809,952,266 2043 809,952,266 37,459,126 (31,176,250) 816,235,143 2044 816,235,143 36,742,587 (52,356,000) 800,621,729 2045 800,621,729 35,565,740 (61,209,250) 774,978,220 2046 774,978,220 34,243,928 (63,046,250) 746,175,897

Attachment TMI-12-006 Page 8 of 13 2047 746,175,897 32,767,423 (64,940,500) 714,002,820 2048 714,002,820 31,117,048 (67,078,750) 678,041,118 2049 678,041,118 29,590,188 (62,860,500) 644,770,805 2050 644,770,805 28,036,074 (61,900,250) 610,906,629 2051 610,906,629 26,316,719 (63,781,500) 573,441,848 2052 573,441,848 24,769,364 (58,486,250) 539,724,962 2053 539,724,962 24,655,349 (27,139,750) 537,240,561 2054 537,240,561 25,094,939 (15,516,250) 546,819,250 Total (638,216,750)

Note 1: The earnings are calculated using the estimated After-Tax rate of return.

Note 2: The withdrawals are Jersey Central Power & Light Company's share of the total decommissioning expenditures contained in the FinancialEscalationAnalysis for the Decommissioning of Three Mile Island Unit 2, dated May 2009 (Reference B). The expenditures are assumed to be made at the beginning of the year.

Note 3: The estimated escalation rate has been applied to the withdrawals.

Attachment TMI-12-006 Page 9 of 13 Schedule 4 FirstEnergy Corp. Consolidated Three Mile Island Nuclear Station, Unit 2 Pre-Tax After-Tax Equivalent Estimated Weighted Average Net Investment Rate 2.00%

Estimated Escalation Rate 2.81%

Estimated After-Tax Rate of Return 4.81% 6.03%

Qualified Trust Balance on December 31, 2011 627,631,400 Non-Qualified Trust Balance on December 31, 2011 37,125,265 Total 664,756,665 Beginning Ending Year Balance Deposits Earnings 1 Withdrawals2'3 Balance 2012 664,756,665 31,974,796 696,731,461 2013 696,731,461 33,512,783 730,244,244 2014 730,244,244 35,124,748 765,368,992 2015 765,368,992 36,814,249 802,183,240 2016 802,183,240 38,585,014 840,768,254 2017 840,768,254 40,440,953 881,209,207 2018 881,209,207 42,386,163 923,595,370 2019 923,595,370 44,424,937 968,020,308 2020 968,020,308 46,561,777 1,014,582,084 2021 1,014,582,084 48,801,398 1,063,383,483 2022 1,063,383,483 51,148,746 1,114,532,228 2023 1,114,532,228 53,609,000 1,168,141,228 2024 1,168,141,228 56,187,593 1,224,328,821 2025 1,224,328,821 58,890,216 1,283,219,038 2026 1,283,219,038 61,722,836 1,344,941,873 2027 1,344,941,873 64,691,704 1,409,633,578 2028 1,409,633,578 67,803,375 1,477,436,953 2029 1,477,436,953 71,064,717 1,548,501,670 2030 1,548,501,670 74,482,930 1,622,984,600 2031 1,622,984,600 78,065,559 1,701,050,160 2032 1,701,050,160 81,820,513 1,782,870,672 2033 2,870,672 85,756,079 1,868,626,752 2034 1,868,626,752 89,760,456 (2,505,000) 1,955,882,208 2035 1,955,882,208 93,901,984 (3,658,000) 2,046,126,192 2036 2,046,126,192 98,237,285 (3,771,000) 2,140,592,477 2037 2,140,592,477 102,776,399 (3,869,000) 2,239,499,876 2038 2,239,499,876 107,528,506 (3,980,000) 2,343,048,382 2039 2,343,048,382 112,503,658 (4,095,000) 2,451,457,040 2040 2,451,457,040 117,711,861 (4,225,000) 2,564,943,901 2041 2,564,943,901 123,165,240 (4,336,000) 2,683,773,141 2042 2,683,773,141 128,874,866 (4,462,000) 2,808,186,007 2043 2,808,186,007 129,075,436 (124,705,000) 2,812,556,444 2044 2,812,556,444 125,210,671 (209,424,000) 2,728,343,114 2045 2,728,343,114 119,456,644 (244,837,000) 2,602,962,758 2046 2,602,962,758 113,072,410 (252,185,000) 2,463,850,168

Attachment TMI-12-006 Page 10 of 13 2047 2,463,850,168 106,016,641 (259,762,000) 2,310,104,809 2048 2,310,104,809 98,210,090 (268,315,000) 2,139,999,899 2049 2,139,999,899 90,839,635 (251,442,000) 1,979,397,534 2050 1,979,397,534 83,299,413 (247,601,000) 1,815,095,947 2051 1,815,095,947 75,034,554 (255,126,000) 1,635,004,502 2052 1,635,004,502 67,390,962 (233,945,000) 1,468,450,464 2053 1,468,450,464 65,410,779 (108,559,000) 1,425,302,243 2054 1,425,302,243 65,571,711 (62,065,000) 1,428,808,955 Total (2,552,867,000)

Note 1: The earnings are calculated using the estimated After-Tax rate of return.

Note 2: The withdrawals are the total decommissioning expenditures contained in the FinancialEscalation Analysis for the Decommissioning of Three Mile Island Unit 2, dated May 2009 (Reference B). The expenditures are assumed to be made at the beginning of the year.

Note 3: The estimated escalation rate has been applied to the withdrawals.

Attachment TMI-12-006 Page 11 of 13 Decommissionina Analysis Based on NRC Formula

1. The minimum decommissioning fund estimate, pursuant to 10 CFR 50.75(b) and (c) (see Schedule 5):

Metropolitan Edison Company $232,034,358 Pennsylvania Electric Company 116,017,180 Jersey Central Power & Light Company 116,017,180 FirstEnergy Corp. Consolidated $464,068,718

2. The amount accumulated in external trust funds at December 31, 2011:

After Tax Metropolitan Edison Company $308,298,782 Pennsylvania Electric Company 165,117,425 Jersey Central Power & Light Company 191,340,458 FirstEnergy Corp. Consolidated $664,756,665

3. There are no longer any funds to be collected from the ratepayers.

4. The assumptions used regarding escalation in decommissioning cost, rates of earnings on decommissioning funds, and rates of other factors used in funding projections:

Consolidated Ownership Interest in Unit 100%

Estimated Net Investment Rate 2.00%

Year of Site Restoration Completion 2054 Dormancy Period Early 2034 - Mid-2043 Year of Three Mile Island Nuclear Station, Unit 1 Operating 2034 License Termination An additional assumption is that the decommissioning activities for Three Mile Island Nuclear Station, Unit 2 will be synchronized with those of Three Mile Island Nuclear Station, Unit 1 such that the licenses for both units will be terminated concurrently.

5. There are no contracts upon which the owners/licensees are relying pursuant to 10 CFR 50.75(e)(1)(v).

6. There are no modifications to the licensee's current method of providing financial assurance since the last submitted report.

Attachment TMI-12-006 Page 12 of 13

7. There were no amendments to the Trust Agreements for the above-mentioned owners of Three Mile Island Nuclear Station, Unit 2.

8. Mathematical rounding was performed during the development of the supporting calculations.

Attachment TMI-12-006 Page 13 of 13 Schedule 5 FIRSTENERGY CORP.

Calculation of Minimum Financial Assurance Amount December 31, 2011 THREE MILE ISLAND NUCLEAR STATION, UNIT 2 Pennsylvania Reaions Labor (L) = Northeast Energy (E) = National Waste Burial (B) = Generic For PWR Unit Adjustment Escalation Factor1 Ratio Factor LB 2.510 0.65 1.632 E= 2.580 0.13 0.335 B= 12.280 0.22 2.702 PWR Escalation Factor = 4.669 Base Amount for PWR between 1200 MWt and 3400 MWt = ($75 + 0.0088P) million (P = power level in megawatts thermal = 2772)

($75 + 0.0088(2772)) million = $99,393,600 Escalated Amount for unit =

99,393,600 x 4.669 $464,068,718 Owner/Licensee Ownership Pennsylvania Electric Company 25% $116,017,180 Jersey Central Power & Light Company 25% $116,017,180 Metropolitan Edison Company 50% $232,034,358 FirstEnergy Corp. Consolidated 100% $464,068,718 Note 1: Actual fourth quarter 2011 Bureau of Labor Statistics data used to develop Labor factor, preliminary December 2011 Bureau of Labor Statistics data used to develop Energy Factor, and Burial factor is based on NUREG-1307, "Report on Waste Burial Charges: Changes in Decommissioning Waste Disposal Costs at Low-Level Waste Burial Facilities," Revision 14 data.